FreshBooks is a solid accounting tool for very small businesses and freelancers, especially if they're focused on providing services rather than good. Larger businesses or those with complicated expenses may want to look further, however. Read our full FreshBooks review for the details.
FreshBooks is among the most well-known cloud-based accounting solutions. It’s available anywhere, even as an app on the go. With an intuitive dashboard, streamlined processes for invoicing and expensing and many one-click functions, FreshBooks meets the needs of users who aren’t necessarily accounting experts and earns itself a spot among the best accounting software.
In this FreshBooks review, we’ll take the popular accounting software for a test run and evaluate it in nine areas. We will score each and offer final thoughts on how it all ties together.
FreshBooks has put together a suite of options for freelancers, agencies and consultancies. It is less than ideal for a manufacturing or product-based business, though. It has limited inventory tracking and you’ll have to pay for an app to manage fixed assets and payroll.
Still, it’s a good choice for companies that bill hourly or specialize in project work. If that describes you, FreshBooks is worth a look.
- Wide variety of decision-making tools
- Customers can easily pay online
- Payroll & inventory management
- Time-tracking function feeds into invoicing
- Steep learning curve
- Payroll & credit card processing fees add up quickly
- Advanced features only available at highest price tier
- Most expensive cloud-based accounting software
- Clean, easy-to-navigate interface
- Time tracking & projects
- Unlimited invoices & expenses
- Unlimited access to data in the cloud
- Single-entry accounting
- Poor bank reconciliation functions
- Includes limited reports
FreshBooks performs more like a bookkeeping system than an accounting system. It’s perfect for smaller, simpler businesses. More complex companies might need to look elsewhere, however.
FreshBooks Basic Features
FreshBooks has functions for invoicing, expensing, time tracking and projects. You can create and send invoices and set up recurring invoices for standard monthly charges. There’s ways to automate payment reminders and late fees, too. You can also collect credit card payments through sent invoices, but FreshBooks charges payment processing fees.
If you connect your business credit card to FreshBooks, its software will import and update your expenses for you, which helps the strain of tax season. You can also take a picture of the receipt associated with those expenses, upload and log it in a few easy steps using the app.
If it’s a billable expense, FreshBooks will add a markup and put it on the client’s invoice.
FreshBooks Extra Features
Projects and time tracking take FreshBooks beyond bookkeeping tasks, though. You can invite employees, contacts and clients to contribute to the project and restrict their access to folders and files as needed.
Within a project, you can assign due dates and hourly rates, as well as look at an overview. Xero also has a projects module (read our Xero review). QuickBooks Online does, too, but only on its most expensive plan (read our QuickBooks Online review).
If you need inventory management or payroll processing capabilities, they’re available with FreshBooks, but only through a third-party app. Unfortunately, you’ll have to sign up and pay for that separately.
FreshBooks includes a nice suite of accounting options and covers the basics any small business owner would need. Given the lack of inventory and fixed assets capabilities, though, it seems like FreshBooks targets its software at service-based businesses.
We want to discuss another main function in FreshBooks: sending estimates. It isn’t widely available among cloud-based accounting software, but many freelancers and creative businesses could use it.
FreshBooks considers estimates to be such an important feature that it’s included on the main menu, while reporting is not. The estimate form looks just like the invoice and expense forms. The only difference is it’s what you would charge a client, not what you are charging them.
If you need to create a more robust estimate, FreshBooks has two proposal templates. In the boxes provided, you can type the project overview, scope and timeline. Pricing, notes and terms go on the bottom. When you send the proposal, FreshBooks gives you the option to request an e-signature from the client.
FreshBooks offers three monthly plans. The first, Lite, supports up to five clients and offers unlimited invoicing and estimates, time tracking and expenses. It also supports online credit card payments and can sync with bank accounts.
QuickBooks Online’s Simple Start plan is $5 more expensive and Xero’s Start Plan is around $5 cheaper. Xero restricts the number of invoices, expenses and transactions you can process, though.
The next monthly plan, Plus, supports 10 times the number of clients at nearly double the cost. In addition to the features offered with Lite, Plus adds automatic payment reminders, late fees, proposals and recurring invoices to the mix.
FreshBooks only gives you access to financial reports at the Plus level, while Xero and QuickBooks Online offer it across all plans.
Premium is the most expensive plan and has the same feature set as Plus. For twice the price of Plus, it supports up to 500 clients.
FreshBooks charges an additional $10 per user if you need to add additional ones, which is a downside. Xero, for example, allows you to add unlimited users at no extra cost.
FreshBooks charges credit card processing fees on top of the monthly prices, too. It charges 2.9 percent of the transaction plus 30 cents per transaction. It doesn’t accept Discover, though. FreshBooks automatically books payment processing fees as expenses.
FreshBooks is one of the most user-friendly cloud-based accounting software products. The interface is clean, making it easy on the eyes and easy to navigate.
The main dashboard presents an at-a-glance picture of your business’s health. Horizontal bars display outstanding revenue and total profit, while pie charts break out revenue streams and spending.
There’s no confusing labeling in FreshBooks. Invoices are invoices, expenses are expenses, and both can be found from in the left-side menu or under the “create new” drop-down.
FreshBooks shows new users tips for using the software. The tip will point to features and outline its functions. Those helpful explanations guide you through using the software the first time you visit a screen.
For new users, FreshBooks puts links to help articles related to a page’s function at the top. The first time you visit the “clients” screen, for example, FreshBooks suggests that you read articles about adding and organizing new clients, outstanding revenue by client and importing a client list.
Even if you have no experience with cloud-based accounting software, you’ll feel like a pro in no time with FreshBooks. The help articles will guide those completely unfamiliar, but messing around and common sense should do the trick, as well.
The invoicing system is clear, intuitive and easy to follow. After setting up your company, FreshBooks asks if you’d like to customize your branding and send a test invoice.
Should you choose to customize your invoices’ branding, a pop-up box appears with the option to select one of two templates. You can add your log, and choose a color and font for your theme, too.
To send an invoice, find the menu on the screen’s left and click on “invoices.” Clicking the green “new invoice” button at the top of the screen takes you to the standard invoice form. Rather than tabbing through the invoice’s fields, you click on boxes in FreshBooks.
The standard invoice is comprehensive. It’s easy to add taxes, discounts, terms and notes. Freelancers and companies that specialize in project-based work can request deposits on invoices, a feature that’s unique to FreshBooks.
Rather than taking you through complicated steps, FreshBooks puts a “make recurring” option to the right of every invoice you create. That allows you to send the invoice at regular intervals. If your client wants to put a credit card on file with you, they can pay recurring invoices automatically.
If you choose to make an invoice recurring, you’ll find a section to select settings for that invoice’s client. The ability to customize payment reminders for each of your clients is a great feature. If one doesn’t want you to notify them until a bill is a month past due, for example, you don’t have to change the reminder settings for all your clients.
You can also automatically add late fees to payment reminders, which FreshBooks calculates. If your business bills for regular, predictable work or services, you can set it up in FreshBooks and walk away.
Once you’ve entered an invoice, it’ll appear in the “invoices” screen. It’s easy to search the list for invoices by client name, number or date range.
You can track time on a project for invoices, too. To do so, find “time tracking” on the main menu. Click on the bar at the top of the screen to start a time period. A box will appear where you can input the client, project, service and notes.
You can also track time by clicking the “start timer” button on the screen’s top right.
If you’re setting up a new project, FreshBooks will ask if you’re charging a flat fee or hourly rate. FreshBooks even has a Chrome extension to track time while working.
Once time has been recorded for a client, every time you set up an invoice for them, unbilled time will appear as a drop-down option. You can choose to bill for all or some of the time, but you’ll always know if the client owes you for time worked.
The invoicing system is one of the best we’ve seen for businesses who bill on an hourly or project basis.
You can find the expensing screen from the main menu and it’s laid out like invoicing. You can input expenses by clicking the “new expense” button at the screen’s top right or in the “new expense” box in the middle. On the new expense form, select the category from a drop-down menu of common business expenses.
Once you’ve input the basics, FreshBooks gives you options to the right of the expenses that are helpful to businesses that work on behalf of others. If you click on “mark the expense as billable,” you can choose which client to bill. You can also add an image of a receipt to the client’s invoice.
When inputting an expense, FreshBooks lets you make it a recurring expense with just a few clicks. You can select a start date, set how often it should be paid and adjust how many of them should go out.
Once you’ve entered your expenses, they’ll appear on the main dashboard in a pie chart. That is helpful for tracking where your money’s going at a glance.
You can’t access reports from the main navigation. Instead, you have to scroll to the bottom of the dashboard to find a section called “advanced reports.” There are only nine reports on offer. Unfortunately, there is no ad hoc reporting or budgeting.
You get sales tax summary, accounts aging and invoice detail for income-related reports. For any of the reports, the only custom options are to change the date range and whether the report displays income as billed or collected.
The sales tax summary will show you the tax name, taxable amount and the numbers. If you need to remit taxes to a governmental authority, you can’t do it through FreshBooks like you can in QuickBooks Online.
The accounts aging report shows past due balances by client in buckets of 0-30, 31-60, 61-90 and 90-plus days. You won’t be able to filter or sort by customer, identify trends with a graph or send payment reminders with the report.
The invoice details report gives you more information. The summary at the top tells you the total amount you’ve invoiced and what you’ve been paid. It calculates the total amount still due, too.
Those bare-bones reports won’t grow with your business and don’t provide enough information for you to make proper decisions. It’s evident that FreshBooks focuses on invoicing and expensing and doesn’t pay much attention to reporting or financial statements.
There’s no other way to put it: FreshBooks falls flat on financial statements. Unlike competitors Xero and QuickBooks Online, which offer the standard profit and loss, balance sheet and cashflow statements, FreshBooks only has a profit and loss statement.
The only filters are date range and whether you want income shown as billed or collected. Even free option Wave does a better job here, as you can read in our Wave review.
All you can do with the profit and loss statement is export to Excel, print or email it. There’s no way to see percentage changes, change account groupings or customize the report further.
While knowing your net income is helpful if you’re applying for a bank loan, the bank will ask to see a balance sheet. Without a cashflow statement, you might not be able to predict upcoming cash needs.
It’s clear that FreshBooks understands not everyone wants to spend an hour searching through online help articles for answers. That’s why there’s an email address and phone number right on the help center’s main screen.
If you’re looking for an answer to a specific question, you can type it in the FAQ search bar at the top of the screen. The most popular articles are under that, most of which are geared toward basic questions. To the left is a directory of topics and clicking on them takes you to the relevant articles.
FreshBooks does a great job with its help articles, with embedded videos and screenshots for step-by-step instructions. People only just starting out with bookkeeping will likely be up and running in no time.
FreshBooks targets a specific type of business. The attention that’s been paid to invoicing, time tracking, estimates and projects suits companies that bill for hourly services. The ease with which expenses can be billed to a customer means that FreshBooks anticipates you’ll be passing many of them on to the client.
Inventory management, payroll and fixed assets have been ignored. Apps that integrate with FreshBooks to provide those functions are charged for separately. Given that competitors include them with their software, it doesn’t make sense to pay extra with FreshBooks.
While the pricing is comparable to its competitors, the restrictions on the number of clients supported at each level is odd. It’s unlikely you’ll only ever have five clients, which means, at some point, you’ll be forced to pay for the higher monthly plans.
Even though FreshBooks has the data on your historical income and expenses, you can’t create a budget off of it. Reports and financial statements are limited, especially compared to other software. FreshBooks won’t work in the long term, unless you plan to keep your business small.
While invoicing, expensing and projects capabilities are beautifully set up and easy to automate, the remainder of the software package leaves a bit to be desired. Unless you fit the specific type of business FreshBooks is targeting, you might want to look elsewhere.
Have you used FreshBooks for your business? Or do you prefer another service from among our accounting software reviews? Let us know in the comments below. Thanks for reading.